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Discussing Social Impact Assessment

Weekend Link Roundup (February 19 - 20, 2011)

Each week, we at PhilanTopic compile a list of noteworthy posts from and about the nonprofit sector. Here are a few posts from last week's roundup about impact and effectiveness for your reading pleasure. Have a post you'd like to add to the list? Let us know in the comments section below.

After doing some more thinking about so-called cause competitions like America's Giving Challenge and the Pepsi Refresh Project, Networked Nonprofit co-author Allison Fine wonders how other groups might structure an effort that combines "the fun of competing without the detriment of causes competing against one another."

"I've always thought the catchphrase 'accounting is destiny!' that Clara Miller and George [Overholser] would throw around when they ran the Nonprofit Finance Fund was a little...nerdy," writes Sean Stannard-Stockton on his Tactical Philanthropy blog. "But it sure seems to me that our simplistic nonprofit accounting standards, paired with our moralistic views around spending money on fundraising, is a major culprit of our undercapitalized nonprofit sector...."

And on the Harvard Business Review blog, Uncharitable author Dan Pallotta suggests that we're all to blame for convincing donors that organizations with low overhead costs are more efficient than those with higher costs. Writes Pallotta:

We've been telling the donating public that good charities have low overhead, and bad charities have high overhead. Well, I don't know about you, but when I hear "good," I think, "makes a difference." So, if you tell me [that] good charities have low overhead, then I don't need to know whether the money I give makes a difference. If they have low overhead, I can assume that they do! The Nonprofit Overhead Cost Project at Indiana University's Center on Philanthropy came to the opposite conclusion. Their report, "Getting What We Pay For: Low Overhead Limits Nonprofit Effectiveness," indicates that the charities that spend less on capacity tend to have inferior programs. The donating public might want to know that, don't you think?

We have, as a result of our timidity, managed to confuse a well-intentioned public into basing their giving decisions on the wrong data. That's not what they want. And if they knew that's what we've been up to they'd be pissed....

-- Regina Mahone

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